June 20, 2013, Introduced by Reps. Stanley, Kandrevas, Hovey-Wright, Geiss, Stallworth, Santana, Rutledge, Robinson, Durhal, Talabi, Banks and Nathan and referred to the Committee on Tax Policy.
A bill to amend 1964 PA 284, entitled
"City income tax act,"
by amending section 3 of chapter 1 (MCL 141.503), as amended by
2012 PA 394, and by adding section 3e to chapter 1.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
CHAPTER 1
Sec. 3. (1) The governing body of a city, by a lawfully
adopted ordinance that incorporates by reference the uniform city
income tax ordinance set forth in chapter 2, may levy, assess, and
collect an excise tax on income as provided in the ordinance. The
ordinance shall state the rate of the tax which shall be the rate
authorized by 1 of the following:
(a) The uniform city income tax ordinance under section 11 of
chapter 2.
(b) Subsection (2).
(c)
Section 3a, 3b, or 3c, or
3e of this chapter.
(2) In a city with a population of more than 600,000, the
governing body may levy and collect a tax at a rate to be
determined from time to time, that rate to be not more than 2% on
corporations and the following maximum tax rates on resident
individuals and nonresident individuals for the following years:
(a) Before July 1, 1999, 3.00% on resident individuals and
1.50% on nonresident individuals.
(b) Beginning July 1, 1999 and each July 1 after 1999 through
July 1, 2012, except for 2008 and 2009, the maximum tax rate under
this subsection on resident individuals shall be reduced by 0.1
until the rate on resident individuals is 2.0%. The tax rate
imposed on nonresident individuals shall be 50% of the tax rate
imposed on resident individuals each year.
(c) Notwithstanding any other provision of this section, for
the 2008 and 2009 calendar years, the city shall impose the same
tax rate on resident individuals and nonresident individuals as the
city had imposed for the 2007 calendar year.
(d) Except as otherwise provided under subdivision (e),
beginning January 1, 2013 and each year after 2013, a rate of not
more than 2.40% on resident individuals and 1.20% on nonresident
individuals.
(e) Beginning January 1 of the year immediately succeeding the
year that all bonds, obligations, and other evidence of
indebtedness issued by a lighting authority have been fully paid
and each year thereafter, a rate of not more than 2.20% on resident
individuals and 1.10% on nonresident individuals.
(3) Notwithstanding any other provision of law or any
ordinance of the city to the contrary, a city that forms a lighting
authority shall deposit an amount equal to the sum of the revenue
collected from 0.2% of the rate levied on resident individuals
pursuant to subsection (2)(d) and 0.1% of the rate levied on
nonresident individuals pursuant to subsection (2)(d) directly into
the budget of the city's police department and use it exclusively
to retain or hire police officers. The transfer and use of the
revenue as provided under this subsection shall continue until all
bonds, obligations, or other evidence of indebtedness issued by a
lighting authority have been fully paid and revenue is no longer
being pledged from taxes levied under the city utility users tax
act, 1990 PA 100, MCL 141.1151 to 141.1177, to the lighting
authority. As used in this subsection, "lighting authority" means a
lighting authority incorporated under the municipal lighting
authority act.
(4) The governing body of a city may adopt the uniform city
income tax ordinance with the alternative sections as set forth in
chapter 3 instead of the similarly numbered sections as set forth
in chapter 2. The uniform city income tax ordinance may be lawfully
adopted or rescinded by the governing body at any time. The
adoption of an ordinance is effective on and after January 1 or
July 1 following adoption of the ordinance, as specified in the
ordinance, but an ordinance shall not become effective earlier than
45 days after adoption or until approved by the electors if a
referendum petition is filed as authorized in this act or a
referendum is otherwise required. The rescission of an ordinance
shall become effective on the following December 31. The ordinance
may be rescinded at any time by the governing body in the same
manner in which it was adopted and with appropriate enforcement,
collection, and refund provisions with respect to liabilities
incurred prior to the effective date of the rescission of the
ordinance. The ordinance shall not be amended except as provided by
the legislature. A city may amend the ordinance to change the tax
rate to a rate authorized by this act.
(5) Petitions for a referendum election on the question of
adopting an ordinance adopted by the governing body may be filed
with the city clerk not later than the sixth Monday following the
adoption of the ordinance. The petitions shall be signed by a
number of registered electors of the city equal to at least 10%,
but not more than 20%, of the registered electors of the city
voting in the last general municipal election prior to the adoption
of the ordinance by the governing body. If proper petitions are
filed, the question of adopting the ordinance shall be submitted by
the governing body to the city electors at the next primary or
general election or at a special election called for the purpose,
in any case held not less than 45 days nor more than 90 days after
the clerk has reported the filing of the referendum petition to the
city's governing body. The checking of names on the petitions, the
counting, canvassing, and return of the votes on the question, and
other procedures for the election shall be as provided by law or
charter. Upon a favorable vote of the city electors, the ordinance
shall be effective as specified in the ordinance which may be
amended by the governing body of the city following the election to
specify July 1 or January 1 as the effective date of the ordinance,
if the effective date originally specified in the ordinance is
considered impractical or inconvenient for any reason. The
provisions in this section for a referendum election, and for
delaying the effective date of the ordinance if petitions for a
referendum are filed, are not applicable to a city that on January
1, 1964 had in effect a valid ordinance levying and imposing an
excise tax levied on or measured by income. Notwithstanding any
other provision of this act, if an ordinance becomes effective on
any date other than January 1, each tax year shall end on December
31, and the provisions of the ordinance based on a full tax year
are modified accordingly to be applicable to the partial tax year.
Sec. 3e. A city with a population of more than 100,000 but
less than 110,000 according to the official 2010 federal decennial
census may amend its ordinance to increase the rate to an annual
tax of not more than 1.5% on corporations and resident individuals
and 0.75% on nonresident individuals. An amendment to the city
income tax ordinance under this subsection is not effective unless
the amendment is approved by a majority vote of the registered and
qualified electors of that city voting on the proposition as
provided in this act.